Tax Tabulations

The American Enterprise Institute’s Arthur Brooks recently released a paper calculating that a 28 percent cap on charitable tax deductions, as proposed by the Obama administration, would likely lead to a $9.4 billion reduction in charitable giving in the first year of the change. And the contraction would be more severe in some sectors. Religious giving and giving by the middle class are not likely to shrink much, but discretionary donations from earners in the top tax brackets will decline much more sharply. Nonprofits dependent on high-earning donors—like universities, hospitals, orchestras, and environmental groups—would lose 24 percent of their donations, according to the study.